U.K. nears decision on possible Amway expulsion

GRAND RAPIDS -- British officials are expected to rule within the next few weeks -- perhaps within days -- on a case that could result in Amway's expulsion from the United Kingdom.

The U.K. government sued Amway and several large distributor groups there last year, accusing the Ada company of misrepresenting its direct-selling business, downplaying the Amway name and making it sound as though distributors didn't need to sell products to make money.

In the wake of the allegations, the company said it launched a global review of its business practices, suspended registration of new distributors in the United Kingdom and banned the sale of distributor-produced motivational products in that country.

The allegations are similar to those that have been made against the company around the world for many years. But the wholesale expulsion is the most serious regulatory action the company has faced since a landmark set of rules designed to prevent pyramid schemes was issued in the wake of a U.S. Federal Trade Commission case against the firm in 1979.

The U.K. case wrapped up Dec. 8. Officials from Amway and its parent company, Alticor Inc. have declined to comment beyond this prepared statement:

"Out of respect for the court and British legal custom we will not comment on the case until we receive the judge's ruling.

"We have engaged in a global review of our operations to ensure that we are operating to the highest standards in all our markets. In the U.K. over the past year we have moved swiftly and invested significantly to make changes in our business model that address the issues the government raised with us back in April 2007.

"We believe the case is unwarranted and unnecessary and fails to recognize the reforms that we have made. And in no way do we accept that the arguments the U.K. government has put forward should lead to the company being shut down in the U.K.

"We'll have more to say -- when the UK process allows us to speak."

It is unclear what the company would do if the government expels the company, though an appeal of the ruling is likely. Sales in the U.K. were a sliver of the $6.3 billion the company said it had in sales during 2006.

But the country is one of the company's oldest foreign markets and such a drastic move by regulators there could spawn calls for similar actions in other countries.

The privately held company is owned by the families of co-founders Rich DeVos and the late Jay Van Andel. Last year it reported sales of $6.3 billion.